Real Estate Principles and Practices Chapter 8 Listing the Property © 2014 OnCourse Learning.
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Transcript of Real Estate Principles and Practices Chapter 8 Listing the Property © 2014 OnCourse Learning.
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Real EstateReal Estate Principles and Practices Principles and Practices
Chapter 8Chapter 8
Listing the PropertyListing the Property
© 2014 OnCourse Learning
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© 2014 OnCourse Learning
Key TermsKey Terms
Broker
CMA
Discount broker
Employee
Exclusive agency
Exclusive right to sell
Flat fee listing
Independent contractor
License
Listing contract
MLS
NAR
Net listing
Open listing
REALTOR®
Salesperson
Sherman Antitrust Act
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© 2014 OnCourse Learning
OverviewOverview
Obligations of seller and broker
Types of listings
Commission structure
Employee v. independent contractor
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Need for a ProfessionalNeed for a Professional
Owner may sell their own home
Determine value
Attract prospective buyers
Financially qualify buyers
Prorate expenses
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Contract Between Broker and Contract Between Broker and SalespersonSalesperson
No minimum salary
Salesperson pays taxes
Sets own hours
Pays all expenses
Receives salary
Must withholdSocial security
Income tax
Unemployment tax
Can set hours
Can pay extras
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Using TechnologyUsing Technology
Computer informationMLS, tax information, mortgage rates, maps
Computer software
Cell phones
Voice Mail
PDA
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Obtaining the ListingObtaining the Listing
Listings are the company’s merchandise
Comparable market analysis (CMA)Comparable market analysis (CMA)1. Square footage
2. Compare subject property to:
Recent sales
Active listings
3. Seller proceeds
4. Listing contract
5. Marketing
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The Listing ContractThe Listing Contract
Listing contacListing contact: Seller’s price and terms, broker services and amount of commission
Signed by owners
Restrictions
Broker responsibility
Personal property
Fixtures
Seller costs
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The Listing ContractThe Listing Contract
Basic information:
1. Description of the property
2. Amount of commission and when paid
3. Expiration date
4. Signature of parties charged
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Exclusive Right to SellExclusive Right to Sell
Exclusive-right-to-sell: Exclusive-right-to-sell: Sole right to sell given to one firm
Broker receives commission regardless of who sells
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Exclusive Right to Sell Listing Exclusive Right to Sell Listing ContractContract
Property DescriptionProperty Description
Figure 8.3
Amount of commissionAmount of commission
Expiration Expiration
Price and termsPrice and termsConditionsConditions
Earnest money divided between seller and brokerEarnest money divided between seller and broker
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Exclusive Right to Sell Listing Exclusive Right to Sell Listing ContractContract
Figure 8.3
Signatures of ownersSignatures of owners
Title information / warranty deedTitle information / warranty deed
Promise to maintain propertyPromise to maintain property
Signature of agentSignature of agent
Lockbox / MLSLockbox / MLS
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The Listing ContractThe Listing Contract
Exclusive AgencyExclusive AgencyOne broker
No commission owed if owner sells
Open ListingOpen ListingMultiple brokers
No commission owed if owner sells
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The Listing ContractThe Listing Contract
Net ListingNet ListingSeller receives net amount
Broker receives any amount over the agreed net
100%100%- 7%- 7%
93% = .9393% = .93
$150,000 ÷ .93 = $150,000 ÷ .93 = $161,300 (rounded up)$161,300 (rounded up)
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The Listing ContractThe Listing Contract
Flat Fee ListingFlat Fee ListingRange of services based upon the fee
Lower fee collected upfront
Seller charged for co-op
Discount BrokerDiscount BrokerFee less than prevailing rate
Same service – cost kept at minimum
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Agent CompensationAgent Compensation
No set commission rate - negotiable
Antitrust Laws
Commission payment terms:
Broker produces a ready, willing and able buyer
Prove performance
Sale consummated
Fee is paid if seller terminates
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Terminating Terminating
Mutual consentSeller breach – broker may sue for damages
Broker breach – owner may terminate
Death of either party
Economic change
Property destroyed
Listing prevails until sold or expiredListing prevails until sold or expired
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Terminating Terminating
Expiration of time
Written termination dates
Automatic extensionsIllegal
Listing prevails until sold or expiredListing prevails until sold or expired
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Multiple Listing ServicesMultiple Listing Services
Multiple lasting service (MLS): Multiple lasting service (MLS): Group of brokers who share listings
National Association of REALTORS®July 1, 1992 - Subagency is optional
Must offer cooperation and compensation
Computer access
Processing time limits
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Antitrust LawAntitrust Law
Sherman Antitrust Act: Antitrust Act: fair trade
Price fixing prohibited
Market dictates the fee
Restraint of trade
Boycotting
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Real Estate AssociationsReal Estate Associations
Voluntary organization of personas engaged in the real estate business
Promotes ethics
Protects property rights
Secures benefits for members
State and local associations
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Real Estate AssociationsReal Estate Associations
RegisteredRegistered
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Real Estate AssociationsReal Estate Associations
Specialize in property management coursesSpecialize in property management courses
Developed leadership Developed leadership training and relocation training and relocation
coursescourses
Organization of minority brokers Organization of minority brokers promoting improved housingpromoting improved housing